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An auditor is an independent professional appointed to examine the books of accounts of a company and report whether the financial statements give a true and fair view of the company's financial position. 2. Appointment of First Auditor (a) Other than Government Companies Section 139(6) Appo
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The first auditor of a company, other than a government company, is appointed by the Board of Directors within 30 days of its incorporation. If the Board fails to appoint, shareholders can appoint the auditor in an Extraordinary General Meeting (EGM) within 90 days.
An auditor appointed by shareholders holds office until the conclusion of the first Annual General Meeting (AGM) or for five consecutive years, depending on the type of appointment and company.
An auditor must be a Chartered Accountant in practice or a firm where the majority of partners are practicing CAs. They must not be a body corporate (unless an LLP), an officer or employee of the company, or have any financial interest in the company.
An auditor can resign by giving written notice to the company and must file Form ADT-3 with the Registrar of Companies (ROC) within 30 days, stating the reasons for resignation.
Yes, an auditor can be removed before the expiry of their term by a special resolution of the shareholders, provided the Central Government's prior approval is obtained (unless it's the first auditor) and the auditor is given a reasonable opportunity to be heard.
Auditors are prohibited from rendering services such as accounting and bookkeeping, internal audit, design/implementation of financial information systems, actuarial services, investment advisory, and outsourced financial or management services.
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